J: David: Okay. So I’ll give you an example. J: But what are some other common terms? And then our fourth and final question, which I rather enjoy is what is something that you have splurged on in your professional or personal life somewhere along the way that was totally worth it. Sure. And there are buyers out there but very few of them have a lot of money, most of them have a little bit of money. David: And over leverage is obviously one of the biggest risks in the real estate business. Awesome. Fundrise enables you to invest in high-quality, high-potential private market real estate projects. Okay. And so to learn anything more, we have to engage with that business broker and probably go through and sign nondisclosure agreements and things like this. David: Join for free and get unlimited access, free digital downloads, and tools to analyze real estate. So I’m curious, on the broker side of it, you’re saying there is no public MLS, is there like some kind of background MLS or something that brokers are aware of a place that business brokers can go to solicit these businesses or see what might be out there? Anything you can do to make more buyers available means that the length of time on market can be shortened. David: So where I live, dual agency is perfectly okay as long as there’s disclosure between all the parties understanding that the broker is acting for both parties. And he had been in roofing for 30 years and he wanted to sell and he had a choice, he could either find someone 20 years younger that had 10 years of experience, who knew how to measure, estimate and how long it should take to install the roof. I’d love to talk about the buyer side. Here’s what’s amazing, here’s what’s absolutely amazing is that if you go into any car dealership and you and you ask those people, “How are you going to sell more cars?” The very first thing they’re going to think about is the fact that customers don’t have $40,000 in their bank accounts. So go to our show notes for anybody that wants more information or links to all those things. David: Carol: How do we calculate the valleys, how do we calculate the extra labor that’s going to go in depending on the shape of the roof and all that kind of stuff. Oh, geez. If you want to find a great opportunity to buy a business, maybe an under-priced business or a great a win-win for both you and the seller, these are things to look for. And what I would say to both the buyer and the seller is I would say, “Look, I am going to be sharing any and all information that I have to try to get this deal done.”. So it’s not worth zero, it’s just producing zero. And if they’re not in place, what’s going to happen to your business? "The BiggerPockets Business Podcast asks entrepreneurs of all stripes and delve into stories that go beyond the launch. Maybe we’ll have you back and talk about the buyer’s side another time. Question number three. J: In fact, I met someone in the UK the other day who… several different countries. Buying and selling a business seems complicated… but it doesn’t have to be that way! My question, the second one of our Four More is, what is that defining moment when you realized you had an entrepreneurial itch? And so some of them will be specialized by the type of business. That we can’t know that they’re for sale or these whole businesses might fall apart. J: BiggerPockets Business Podcast 96: Starting Successful Businesses with NO Industry Experience with Jeff Fenster There are often standard prerequisites for starting a company. You can also text Empower’s human coaches, who give personalized recommendations and they’re on standby to steer you through whatever financial challenge might come up in your life. And then they’ll have things like the overhead labor and the direct line labor, if they’re in a service business will be mixed together on one line. David: So for example, in the example of Florida, the business brokers there are quite organized with this system, but everywhere else, not really. J: And like I said, we may ask you to come back at some point and talk about it from the buyer’s side as well because I have a whole lot more questions that we didn’t have time to get to. Was critical in helping the sale of that business in a timely and efficient manner. BiggerPockets Money Podcast 195: 3 Degrees, Debt Free, and “Coasting” to Financial Independence. Yeah, they can figure out their business margins, they can’t figure out their product margins. So I did think that was very interesting. And when I was a business broker, I used to say, “I’m trying to get the deal done.” And of course I have the interest of everyone at heart, but most importantly, my reputation is my interest because in any community, if you do something that’s going to really hurt somebody else, your days in business brokerage are numbered because people will find out. J: And this is what causes a lot of confusion because realtors hold the same license as business brokers, some them feel that they’re qualified to do the deals and it can lead to a lot of problems. Fill in this form. Sometimes a very modest amount, a little 5% stake. Carol: David: BiggerPockets Business Podcast Welcome to a real-world MBA, where entrepreneurs guide you through what it really takes to start, scale, and sell your own business. David: You do. 1. David: Can they say, “I want to buy this business, but I’m uncomfortable doing it myself I want to be represented. So why do they sell it? BiggerPockets Business Podcast 42: Building a Business You Can Sell for Top Dollar with David Barnett. And let’s say we’re thinking two, three, five, 10 years down the road and we know that our likely exit strategy, potentially are our exit strategy, I should say, is we were going to want to sell that business. Unsubscribe. It might not be the thing that each of them wants, but they can both live with it, and then they have to work together to help get the financing in place. One mindset is the investor, “If I put some money down and I acquire this business, what sort of rate of return will I get on my investment?” But the second mindset is that of a job seeker, “Am I going to be interested in doing this work? And unless you can demonstrate that it can be transferred over, you have to basically look for a younger clone of yourself. So one more differentiator, I think maybe based on your description is in a real estate transaction, both the buyer and the seller are each represented by their own agent, somebody would represent their own interests. So that can get as detailed as sitting down with a buyer and helping them write a business plan with cashflow projections and everything. So I imagine as a real estate people, you guys get that analogy pretty well. And that really wasn’t where my heart was, I was interested in everyday businesses that you see when you’re driving your car through your city, all the different businesses that people own that they’re trying to run, they’re trying to provide for their family and they’re trying to make their customers happy so they keep coming back. BiggerPockets Podcast 456: 126 Multi-Family Units On a Military Salary with Erika Sleger. I spent two and a half years going through that program while I was working under someone else’s wing and became the first person in my city to ever be certified as a business broker, a designation that had been around since the ’70s, and so it just goes to show that there are some really underserved markets out there when it comes to real professional business brokerage. I’m on the wrong side of this. It’s called AutoSave. What is a real challenge is figuring out how to do these things without it. Why am I putting up with this?” But I mean, that’s just, what? And they’ll use these big public websites, things like BizBuySell, BusinessesForSale.com. David: So that seller, for example, could liquidate surplus inventory in advance of a sale. David: So I’ll give you an example. Or if I’m a buyer, what are some terms I could be asking for to alleviate the financial burden on me up front? Subscribe. It finds them for us. And I had spent three and a half hours there after school, and I don’t know what I was earning, probably like six or $7 an hour back in those days. That’s awesome. So think about this, if I have a business with $1 million in sales and I have a profit of $100,000 so my costs are fixed. Every Tuesday, you'll meet a new guest and learn actionable tips for hiring, firing, marketing, raising capital and more. As small business owners who are starting or growing a business right now, what are some of the things we should be thinking about so that when we get to that point where we might want to sell, our businesses prepared for it? That’s great. Don’t worry about that. So there are some big business for sale websites out there, and if you go looking, what you will find is listings that say things like this, “Family friendly franchise restaurant in the greater Atlanta area with revenues of $1.5 million and cashflow of 170,000.”. The buyers generally have access to financing in the form of mortgages and we have a pretty good idea of what’s available for sale because different real estate agents have listings out there. In a lot of jurisdictions in North America, different States and provinces, business brokers are actually covered under the same legislation as real estate agents. Now, things like the daughter’s cell phone, I mean, that’s pretty easy. And then they’ll have a cost of goods sold line and they’ll have one cost of goods sold. So they’re working in a certain city or a certain state, or several counties for example, and they’re representing any business that comes along within that area. ZipRecruiter is an online marketplace that posts our jobs on over 100 different job boards. If they wanted way more money, in the beginning I still took it but after a while I learned that if they wanted way more than what it was worth, that I was just wasting my time. Tell us, don’t hesitate to tell us about your books, tell us how they can get in contact with you if they’re looking to find out more about your services or anything else you want to tell us about, and what’s the best way to connect with you? Back in those days, if you came home and you had a water leak in your pipes, you grabbed that phone book because you needed to find a plumber that could be at your home in 10 minutes. At least. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. David: You meet great people, you make business contacts, and you don’t get cramped up with your knees, jammed into the person in front of you. I had no place to bring some of these B and C tier blending opportunities. In my mind, that’s not enough. And it’s one of the reasons why it’s important for the business market to be secret. And when I complained about them, the government agency basically said, “Well, we don’t really enforce in that way.” And I said, “Great, where do I hand in my license? What’s your backstory? How am I going to be certain that it’s all going to be transferred over. Carol: Carol: I love doing these interviews. And I think that’s again, another great analogy for our real estate investing listeners out there that when thinking about buying and selling businesses, leverage has the same double-edged sword, it has the benefits, but it also has tremendous risks. So don’t worry about that there are several online marketplaces for businesses where people who want to buy or sell their business can go without a broker, so BizBuySell, BusinessesForSale.com. I’ll get you the money.” The car dealer is keenly aware that the problem people have in buying a car is getting the money. Usually, the seller can be as involved with the banker as the buyer is, providing information, background, etc. David: When a buyer goes to look at your business, they’re going to want to see what’s going on in your business. I was just going to say, speaking of tax returns and these double-edged swords and all that, from a buyer standpoint, I’m thinking about flipping it over the buyer side now instead of just talking about the selling, when the tax returns just simply don’t agree with the financial statement, how do we as a buyer know what to believe? And I joined up with a big international franchise brand and business brokerage, and the reason why I chose them is they created an opportunity for me to learn. So the seller needs to make sure that his buyer is successful so the buyer can afford to make the additional payments, whatever the terms are, to finish paying for the business. If I’m a seller, what are some other common terms that a buyer may ask for to sell the business? And if you’ve ever heard a real estate agent, for example, complain about going through dry spells, they’ve got nothing on business brokers because it would typically take me one to two years to convince someone that I was the guy to sell their business. David: So, just to give an example there, let’s say I have a business that I’m paying myself $30,000 a year, fair market value for somebody to run the business, let’s say a general manager or a manager is $70,000 a year. He’s not going to buy the flower shop, it’s not within his wheelhouse of interest or desire to own the flower shop, even though it’s a profitable business. Joining us from Maui are the co-hosts of the BiggerPockets Real Estate Podcast, Brandon Turner and David Greene. What is important though is that you figure out if you’re going to sell a business, you have to make sure that you’re going to be working with a qualified business broker who really knows what they’re doing. But into about the third year, I realized that what they were trying to do is turn me into what I refer to as a Fortune 500 bureaucrat, some middle manager inside a big organization. And that was the first time I was ever involved in the sale of a business. That’s great. And so I would collect an engagement fee from that person, and I would do an evaluation and show them what I thought the business would sell for and suggest an asking price for them. I would love to. 91: How Businesses Get Sold for Millions with Chris Younger. Listen to BiggerPockets Business Podcast with ninety-three episodes, free! What does a business broker not to? On this week’s episode of the Biggerpockets Money Podcast, we chat with Alan Donegan.Alan Donegan watched and helped his father run a super successful sportswear company—until the economy shifted and they lost everything.Determined to not follow this path, Alan got a job.

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